If the budgeted indirect cost arte is $115 and the budgeted cost allocation base is $830 per hour, then the annual indirect cost (budgeted) will be ___________?
Correct answer: D. $95,450
- A. $93,450
- B. $94,560
- C. $96,450
- D. $95,450
Explanation
Annual budgeted indirect cost is obtained by multiplying the rate by the allocation base: $115 × 830 hours = $95,450. Option d is therefore the calculated amount.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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